Do you need to pay tax when you sell your home?

In general, there is no Capital Gains Tax (CGT) when you sell your home. This applies to a property which has been used as the main family residence. An investment property which has never been used as your own home does not qualify for relief. This

In general, there is no Capital Gains Tax (CGT) when you sell your home. This applies to a property which has been used as the main family residence. An investment property which has never been used as your own home does not qualify for relief. This relief from CGT is commonly known as Private Residence Relief.

Taxpayers are usually entitled to full relief from CGT where all the following conditions are met:

  1. The family home has been the taxpayers only or main residence throughout the period of ownership.
  2. The taxpayer has not let part of the house out – this does not include having a lodger.
  3. No part of the family home has been used exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use).
  4. The garden or grounds including the buildings on them are not greater than 5,000 square metres (just over an acre) in total.
  5. The property was not purchased just to make a gain.

If a property has been occupied at any time as an individual’s private residence, the last 9 months of ownership are disregarded for CGT purposes – even if the individual was not living in the property when it was sold. The time period can be extended to 36 months under certain limited circumstances. There are also special rules for homeowners that work or live away from home.

Married couples and civil partners can only count one property as their main home at any one time.

Source: HM Revenue & Customs Tue, 31 Oct 2023 00:00:00 +0100

Latest INSIGHTS

Check out our latest Insights for useful accounting tips and information.

Falling inflation – what does it mean for you?

The following notes are reproduced from a Treasury statement issued 21 May 2024.

Lower inflation supports people by maintaining the purchasing power of their money.

If prices only rise slowly, people can plan their budgets more effectively –

Read More

New Brooms

As time passes during the present election campaign, its seems more likely that we may have a change of government from the 5 July.

Labour have disclosed a number of tax changes they would introduce. To summarise they are:

Private school fees

Read More

Tax Diary July/August 2024

1 July 2024 – Due date for corporation tax due for the year ended 30 September 2023.

6 July 2024 – Complete and submit forms P11D return of benefits and expenses and P11D(b) return of Class 1A NICs.

19 July 2024 – Pay Class 1A NICs (by the 22 July

Read More